|How Long Has it Been on the Market?|
At every Open House I hold, buyers always ask the same 2 questions: "What are the taxes" and "How long has it been on the market?". I find the second question rather interesting when everyone these days is walking around with some mobile app that is giving them exactly that information. But it is asked none the less. Let me ask "Does it really matter"? The answer is, yes and know.
On the yes side, with the low inventory we've been experiencing, the old adage that the listing is hottest the first 10 days is more valid than ever before. A hot listing won't even last ten days. The implication for buyers is that you can expect the newest listings to sell at or above the list price during the first ten days on the market. If a property has been listed for 30 days or longer, chances are that it is over priced or undesirable in some other way unless, of course, it has fallen out of escrow through no fault of the home. For example the buyer did not qualify for the loan (after presenting a very solid pre-approval letter).
So let's say 123 Main St was in escrow after 3 days on the market and 21 days later the buyer couldn't perform and canceled, the days on market (DOM) might show 24 even though it was only available to the public for 3. Huh, how could that be?
When an offer is accepted the listing agent has the option of changing the status to either "backup" or "pending". The DOM counter continues to add days to properties in backup status which in some ways makes sense because in theory it is available for backup offers. I say in theory because mostly the agents really just want their listings to continue to show as active on all the websites so they get calls. Yes, Zillow, Trulia, and all the others continue to show backup listings along with truly available properties - most likely so they can sell more "impressions".
The point I am trying to make for buyers who are focused on Days on Market as an indicator of value or how much to offer is that as currently construed it is a misleading data point. Here's what current DOM looks like for North Redondo Beach.
It is highly doubtful that the listing you want to buy is going to be available anywhere close to these average DOMs. So what you should really be asking is when the property was first listed and if the answer is longer than 30 days has it been in escrow before or have there been any price reductions (which many of the websites also show).
Here's another tip.
If a property has just had a price reduction, chances aren't that the seller is looking to discount the list price even further. You really want to get your offer in BEFORE the price reduction when there will be less competition and the owner may be more amenable to realizing the original price was too high.
In answer to that other question about taxes, 1% of the selling price plus the local assessments and bonds.
The third most common question is "Why are they selling?" to which I always wonder "Why does it matter?". People sell for a lot of reasons. What you might want to really find out is whether the house is owner occupied or tenant occupied, is it a trust or probate sale, does the seller require a lease back, will anything out of the ordinary come up in the disclosures. If the property is a townhouse or condo is the HOA self managed, active or inactive, do they have reserves and are there special assessments and litigation.